This FIRST award (R29) project will examine sources of variation in treatment patterns, costs and utilization-based outcomes among elderly and disabled Medicare beneficiaries suffering from psychiatric disease. Aim 1 is to determine how the availability of mental health resources, other regulatory and financing factors and patient characteristics influence treatment patterns among Medicare patients receiving mental health services. Treatment setting, facility type and therapy option will be examined. Aim 2 is to compare the outcomes and costs of Medicare patients who experience different patterns of psychiatric treatment, using econometric techniques to control for selection into different treatments. Outcomes examined will include continuity of care, rehospitalization, length of hospital stay and discharge status. Aim 3 is to examine how provider characteristics and market structure influence treatment patterns, costs and outcomes. Provider characteristics considered will include facility ownership, profit status, size and teaching status. Aim 4 is to examine how patient characteristics and the availability of psychiatric services affect unmet needs among persons in need of mental health services. This analysis will allow us to establish whether the elderly are an underserved population with respect to psychiatric treatment and will enable us to determine the nature of the selection bias from restricting analyses to the treated population only. The analyses of Aims 1-3 will rely primarily on Medicare data, along with several other secondary databases. Aim 4 will use diagnostic and treatment information from the 1996 National Health Interview Survey.